I never cease to be amazed at the ways in which the media can whip up a frenzy: whether it’s forecasters
predicting a storm of the century, entertainment-focused, paparazzi types reporting on some dysfunctional celebrity’s latest miscue or, in the case of the economy, pure doom and gloom stories that make the much anticipated Recession a self-fulfilling prophecy.
My most recent ‘fan-the-flames’ favorite appeared on the front page of the New York Times business section. It focused on 40- and 50-something blue collar types who, having lost their $18-an-hour jobs, have been forced to move back in with their octogenarian parents. Ouch. Talk about grim. Not content with reporting just the facts, though, the reporter felt compelled to dig deep and elicit such quotes as, “I’m ruined,” and “I’ll never be able to dig myself out of this hell.”
The media helped build the dotcom mania of 1999 and 2000 by waxing ecstatic about get-rich-quick schemes that, as we now know, were anything but.
Now, they’re taking the opposite tack and filing one negative story after another. Which begs the question: which came first? The poor economic news or the negative press? My money’s on the latter.
Many, many economic indicators and very smart people have pointed to conditions that historically warrant recession. That’s news. It would be irresponsible to report otherwise. Believe me, as a journo I’d like to think I had the power to move markets, but that’s a stretch. A large portion of the huge, institutional trades are made algorithmically…when certain market conditions exist, the trades are made almost automatically. CalPERS isn’t bailing out of positions because they read about “recession fears” on MSNBC.
Repman :”This is the kind of fear-mongering prose that becomes a self-fulfilling prophecy, scaring people into squirreling their money away instead of spending it to reignite the economy.”
George W Bush: “As we work with Congress in the coming year to chart a new course in Iraq and strengthen our military to meet the challenges of the 21st century, we must also work together to achieve important goals for the American people here at home. This work begins with keeping our economy growing. … And I encourage you all to go shopping more.”
Rep, you either (a)share W’s level of intellect or (b) paid has little attention in econ. class as he. Which is it?
From the international Herald Tribune, 1/14/03:
“Bush did nothing to mobilize public opinion to accept the sacrifices that war implies — the first thing a leader would do. Tax cuts could go ahead as planned, and energy saving was dismissed out of hand. “Go shopping” was the administration’s message.”
My money is on the poor financial performance of the companies big and small fuel the negative press, Rep.
Will newspapers reporting on their own demise and faltering business plans fix their problems? Will it make you, a reader, stop buying a copy of the Post on your way home to NJ?
today we had a 600 point turnaround on the Dow. Good news…however, is our economy now saved? Nope.
It’s all in the fundementals and reporters report the news.
I’m interested in what Gene and other reporters on your staff might have to say about this…
Lunch boy: if you really think the media isn’t fanning the recessionary flames, check out today’s front page econonmic analysis piece by David Leonhardt in The New York Times. It’s not only suggesting that a recession has started (which it hasn’t), but quotes several doomsayers to the effect that “…the recession could be a long, deep, severe one.” This is the kind of fear-mongering prose that becomes a self-fulfilling prophecy, scaring people into squirreling their money away instead of spending it to reignite the economy. So, again, I ask: which came first: the negative press coverage or the poor financial performance?
You said the R word! On the front page of USA Today yesterday, “Markets expect wallop today”. On NPR yesterday morning they discussed the R word and got me, a business owner, worked up into a frenzy. Today on The Today Show, “Bouncing Back” as the second story (behind Heath Ledger, such a shame). I agree with you – the media creates negative news and consumers react. I mean, how else would we know we’re in a recession?
This is history in making, Rep.
The Fed has never cut rates by .75 basis points until now. What’s more they have never cut more than a quarter intra meetings (in-between FMOC meetings).
Gloom and doom stories are not what’s taking us toward a recession. Consider:
4 out of the past 5 months, the leading indicators are down.
Consumer confidence has dropped in the past 90 days.
Whenever the housing market has had this much of slump, it leads to a recession.
Whenever unemployment jumps by more than .6 or more, it leads to a recession.
The thing is, by the time we’re in a technicial recession (2 consecutuve down quarters) we’re most likely on our way out of it.
So, the media reports on the news. It seems like the war in Iraq has lost its news steam and the candidates seem as if they have been campaigning for over 2 years now…so, here is your headline news for now till the Bulls start charging.
Once we test the bottom, you’ll get your Britney back at the top of the news hour, followed an inmate who wrongly imprisoned for years, sues and gets rich. There might even be a tech story or a weight loss story involved to help round things out…
So, my money is on the poor economic news this time around…
BTW, chicken noodle soup, coupld of crackers and a mixed-berry yogurt.